BOLSTERING BROKERS

Incoming IBAO president Danny Craig’s agenda is set on education, technology and political
communication for the year ahead.

By Anna Sharratt

(reprinted from ci Canadian Insurance Magazine, Oct. 2001)

It’s 8 a.m. at the Insurance Brokers Association of
Ontario’s office in uptown Toronto and Danny Craig is impatiently awaiting an association
golf game. “Is this going to take long?” he jokes, looking forward to when he
can to change out of his suit and hit the links.

His excitement might also stem from the fact that Craig,
incoming president of the IBAO and president of Craig, McDonald and Reddon Insurance
Brokers, has a big year ahead, both in terms of his lengthy itinerary and the issues
facing brokers. While the implementation of the CSIO portal remains a priority, the
education of brokers and their role in the political decision-making process are also
drawing considerably attention.

Craig wants to talk about areas — education in particular
– that the IBAO has made significant inroads in the last year. He is proud of the
fact that six major insurers have decided to sponsor the association’s off site education
program rather than compete with one another. Craig lists them off “Zurich, Royal and
SunAlliance, the Dominion … they’ve all agreed to continue this year.”

Another achievement on the education front is the creation
of a new national designation. In September, the IBAO, in conjunction with IBAC, launched
the Canadian Professional Insurance Broker (CPIB) designation, which is divided into areas
of personal lines, commercial lines and management. Launched this month, the first course
–Law and Ethics – so far has 48 registrants. Craig calls member response
“excellent.”

Craig is certainly a believer in life-long learning. Before
starting up his Hannover, Ontario-based brokerage, he basically taught himself the broking
industry by reading manuals and talking to professionals. In his view, an open mind leads
to professionalism.

Craig feels that educating brokers and brokerage staff is
crucial in elevating the status of intermediaries in the insurance industry.
“Personally, I believe education is the most important aspect of our business. If we
continue to educate all our staff and people in the industry, the more professional we are
to the consumer, to the government, to everybody. Education breeds confidence — you can
see it in the employees and staff when they know the product.”

And professionalism is needed in an industry increasingly
threatened by financial services institutions. Though Bill C-8 has staved off the banks,
preventing them from retailing insurance through their branches for the moment, the
knowledge that the tough competitors may return is never far from anyone’s mind. In the
meantime other players such as credit unions, Internet sellers and direct companies
threaten the position of the broker in the Canadian insurance marketplace.

While Craig is confident banks have decided to pursue other
avenues, he still feels brokers should be playing their strong cards. “We won the
battle, but we haven’t won the war. It’s not going to go away.”

Instead, Craig foresees banks and insurers blending their
distribution strategies if ownership rules are changed. “The main thing would be the
rules of ownership of brokerages. It’s quite possible there might be relationships between
banks and brokerages — creating different distribution systems,” he says. While
Craig does not support such a development, he admits it’s likely to happen.

He cautions that brokers should be ready. “As long as
we maintain that professionalism and the respect of that consumer, and that ability to
deal in every community, we’re there. If we have a presence in every community, that’s our
biggest advantage over the direct distribution system.”

Educating brokers about technology is another of Craig’s
missions. The IBAO has puts its stamp of approval on a technology report that lists ways
brokers can ready themselves for doing business via the Internet. “If insurers can do
business 5 to 7 cents cheaper through someone using the Internet than someone who refuses
to change, it’s certainly going to be a push to that broker to make that change.”

Craig says the onus is on the association to make brokers
understand the advantages of going online – to act as a catalyst. Calling it his
“number one priority,” he says “we’re going to force brokers if they don’t
want to go on their own.”

There has been positive broker reaction to the CSIO portal
— one of the IBAO’s biggest projects over the past year. Presently in phase one and set
to be launched early next year, three insurers have agreed to pilot the portal in their
offices as of September.

“Technology will be the biggest change we’ll see in
the next three years as the CSIO portal is introduced. We’re going to see more changes in
the years ahead than we’ve seen in some time,” notes Craig. “And the
brokers’ ability to adapt to change will be very important to their ongoing success.”

Communication, particularly with government
representatives, is another of Craig’s aims. And to maintain its reputation as one of the
“most powerful lobby groups” in the country, the IBAO is working hard at
creating political action networks with members and MP’s across the province. He says that
the IBAO has compiled a list of every MP in the province — and a list of which members
have close ties to key politicians. “So we know that if we have to speak to our MP in
London, we know who our broker is that has a personal relationship with him.”

Maintaining personal relationships with MPs is the only way
the IBAO can make progress, particularly in lobbying, according to Craig. “We
can’t just show up when there’s an election. Or when we want something.
We’re trying to get it out to the grassroots members: be in constant contact, help
out whatever party it is. It’s not just showing up with your hand out when the election’s on.”

One area that has taken up significant association time and
resources is the impending FSCO/OSC merger. Craig says that after “continual
lobbying” of FSCO, he feels the IBAO’s voice has been heard. “We don’t believe
we should be involved [in the merger]. What they’re doing is trying to control wealth
management and what we do is risk management. It’s an entirely different field and we’re
such a small player in the overall scheme, we could get lost in the shuffle.”

For now, it’s wait and see as the Ontario government
reviews the IBAO’s position paper on the proposed merger. But Craig is optimistic of the
outcome. “At least they know our position.” It can’t hurt as well that Jim
Flaherty, Minister of Finance, is the keynote speaker at the IBAO convention in October.
“We’ve done all we can do right now,” says Craig.